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Trader looks for more gains in Avanir

Avanir Pharmaceuticals rose with positive news on its core drug Friday, and one trader is looking for more upside this year.

optionMONSTER's Heat Seeker system detected the purchase of 3,000 December 4 calls in two blocks of 1,500 that went for $0.55 and $0.50. This is clearly a new position, as the open interest in the strike was a mere 50 contracts before the session began.

AVNR gained 2.81 percent to $3.29 on Friday after reaching an intraday high of $3.86, near a two-year resistance level around $4. The stock initially spiked on news that a European regulatory panel had recommended approval of the company's Nuedexta neurological drug, which is designed to treat a rare condition called pseudobulbar affect.

Friday's long calls , which lock in the price where traders can buy the shares, are looking for AVNR to finally break above that $4 resistance by the end of 2013. But if the stock remains below that level through mid-December, these contracts will expire worthless. (See our Education section)

The biotechnology company has not announced the date of its next earnings report but is scheduled to present at several industry conferences in the next few months.

Total option volume in Avanir was 7,150 on Friday, dwarfing its daily average of just 210 contracts in the last month. Overall calls outnumbered puts by a bullish 23-to-1 ratio.